As one of the most successful, slightly under the radar, pre-IPO “trueicorns” (not fake-icorns), the CEO of Navan, Ariel Cohen, disrupts an old space of expense and travel management and remakes things. 

With nine figures in revenue, Ariel and SaaStr founder and CEO Jason Lemkin talk about all things Navan, rebranding when you have brand equity, building B2B software for people, pricing and business models, and much more. 

When Ariel started in 2015, he and his co-founder came to SaaStr as early-stage founders and found hope and some direction for their startup. 

They learned from some of the biggest in SaaS — Aaron Levie and Jeff Lawson. Founders in other stages talked about successful mistakes, giving new founders permission to mess up. 

Is Rebranding Okay When You Have Brand Equity? 

Navan used to be TripActions. TripActions had a super strong brand, so what were the biggest learnings for those looking to rebrand when they’ve already built something meaningful? 

It was a big project because people knew about TripActions. But, if you have a founder leading the way, it can be successful. 

The “why not” was obvious.  The “why yes” is more about who you want to be.  When they started TripActions, their vision was limited. Ariel wasn’t thinking about it as he does today — with a more Amazon-esque view of endless needs to be met. 

So, the TripActions brand was extremely limited and needed a hard reset. 

A Rebrand is More Than a Name Change

Rebranding was more than just a name change. There was a new emphasis on building software for people. 

The rebrand happened simultaneously with the launch of a better-functioning app. 

Before Navan, there were different apps for managing expenses, events and meetings, payments, etc. 

It was a Frankenstein for transient travelers. 

The new app was extremely customer-focused and solved problems for people, like Doordash or Netflix might do, but within Enterprise and SMB. 

It’s possible and even wonderful to create products for Enterprise and B2B that users love to use. 

Enterprise Has Gone Rogue 

If you take the aggregation of all spend for business travel, it’s more than a trillion annually. 

What the Navan team has discovered is that a CFO might say to use Concur or American Express to book, but more than 50% of employees are booking outside of those. 

Lemkin shared a story where he went onto Concur to book the W, which was $1,100 a night. 

As an ex-founder, he couldn’t do that. 

So, he went online and found it for $199 a night and put it on his own credit card. 

Do you know what happened? 

He was told he could be fired and had to defend saving the company several thousand dollars. 

Enterprise doesn’t care too much because they’re huge. You have to manage 10k employees, and Concur helped the CFO and CIO lock things down. 

But that’s not the best way to save the company time and money or manage employee travel effectively. 

Navan solves all of those problems — meeting the CFO’s needs and providing a positive experience for the user, which is why companies rarely churn once they’ve joined. 

Pushing Hard for CAC When Churn is Low

During COVID, Navan lost $100M in revenue overnight. 

Their decision then was to spend money to expand market share, even without any revenue. 

CAC to LTV or payback goes to infinity because you aren’t making money. 

To do this, you need a lot of belief in yourself and your vision. 

Now, they pay employees to choose cheaper things on their platform. 

“Instead of this hotel, choose this one.” 

Navan is in most segments for free, is easy to install, and takes half a day for integrations across the entire org. 

You become the perfect solution if you listen to customers who want to save money and don’t upset employees. 

Should you push more on GTM? 

Yes, as a founder, your role is to convince investors that your vision makes sense and you need money for it. 

Differentiating from the Competition

Traditional travel management charges every time you call and change something. They also have a business model that only connects to one content source. 

Instead of connecting to everything out there, you can only find the cost of the W at one location. 

But shoppers are more savvy these days and can just Google hotel prices to see if it’s fair. 

That’s how Navan stands out — they connect to everything, providing a simplified experience that saves people time, money, and headaches. 

By connecting with everything, they build trust because the prices people see on Navan are the same as Google. 

As a founder, your primary goal is to focus on the end user and understand that person is the most important thing in this equation. 

Pricing for Different Segments

From day one, they were committed to constantly looking at unit economics. 

“Gross margins is something everyone at Navan knows what they are,” says Ariel. 

Gross margins affect how you think about the business and go to different segments and so on. 

It’s a balancing act. 

There’s a lot of complexity in Enterprise and more volume and less volume and complexity in SMBs. 

You need to price accordingly. 

Enterprise are paying more, and SMBs and commercials are paying nothing. 

Find the balance as you think about unit economics. 

Revenue Is Only One Metric 

In today’s world, there’s much more focus on gross margins as part of efficiency, but revenue isn’t the only metric. 

From a fintech perspective, many companies, including Navan, have credit cards and are going to customers telling them to get credit. 

There’s underwriting and some risk because you’re basically a bank but also paying the interest rate. 

If it goes to 5.5 or 6%, the cost of capital goes up and impacts the entire economics. 

That’s why Navan Connect exists — to connect directly to the banks for easy expense management every time you swipe a card. 

There’s no underwriting or giving loans, and people don’t have to switch their cards. But this does remove part of the income, so you have to keep raising money. 

Navan, while in the fintech space, is a tech company, not a bank. 

That’s why revenue is only one metric. 

You can look at topline, but how much do you make out of it? 

If you only look at the top, everything is great. But if you look at the contribution margin, you aren’t giving up much. 

How to Make a Partnership Great Between a Big Company and a Pre-IPO Company

Navan just had a big press release on a partnership with Citi for a travel and expense portal. 

Citi is one of the largest banks in the world, but a lot of times, these big deals are hard to implement and integrate with someone’s system. 

So, how do you make a great partnership between a big company and a pre-IPO company? 

Ariel and his co-founder had and sold a startup early that was an integration platform in the Cloud. 

They connected tough Enterprise systems, so they have the experience to make a partnership like this work, where others might struggle. 

What makes partnerships successful is GTM or sales teams aligning on the value prop for both customers, working together, and implementing GTM. 

A Litmus Test for a Partnership 

Before agreeing to the partnership with Citi, where customers get a smarter card to book trips and manage expenses, Ariel checked in with their CRO. 

He didn’t ask if he liked the partnership. Instead, he asked if he would commit to more revenue. 

The answer was yes, and it is an interesting litmus test to deploy more resources. 

Good CROs or VPs of Sales know how to build a process for a specific company, type of business, or customer. 

So, when you go to someone like that to sign a partnership, you can have a real discussion that’s not based on how sales were done 500 years ago. 

If you’re a product-driven company, you need to be very aligned with GTM and the people leading it. 

What Comes Next — AI

It’s hard to look to the future without talking about AI. 

Navan is working on a chatbot, and she’s becoming really smart. 

What’s she ranked out of ten? 

7.2 exactly. Because they measure customer satisfaction, and that’s what she gets. 

People won’t just start speaking to chatbots at scale, but Navan combines the current buying experience with a chatbot. 

Now, AI can configure the app for you based on the info it has about who you are and your travel habits and preferences and then match you with everything out there. 

It’ll be an exciting and effective way to manage travel and expenses. 

How SaaS Can Support Israel 

Pound for pound, human for human, Israel produces more software leaders than any other nation. 

The Bay area may be number one, but not the U.S. 

So, how can the people in SaaS and Cloud help with the horrific situation happening in Israel? 

Navan has a unique angle for supporting humanitarian crises. They can help get refugees into hotels and convert rewards into donations. 

In Israel, people had to leave their homes overnight with nothing. Their credit cards were blocked because they were stolen and being used. 

To give these people back some of their dignity, the Navan team deployed people into the center of Israel to issue cards with money on them. 

How did they come up with the money? 

Just from personal donations from their board members, friends, and community, and converting rewards into donations. 

Navan has donated $2.2M to these cards to date. 

For other SaaS folks looking to help, Ariel says that people need to tap into their humanity and hearts and think about what’s right for them. 

Ariel’s final piece of advice to founders is…

If you believe in your vision and mission, everything will be ok. 

Jason adds on that a great co-founder or team that never quits is also essential.

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